Unemployment Rate Holds Steady, Jobs Report For February 2012

It's not hitting home runs or anything, but the job market is starting to put together a hitting streak of solid singles and doubles.

The economy clocked in a third straight month of decent job growth in February, keeping unemployment steady, the government said Friday.

It was not exactly the spectacular report many on Wall Street were drooling for. And there is still a long way to go to close the gap in what has been the slowest job-market recovery since World War II.

You will not hear loud cheering from the 12.8 million people still unemployed today, up from less than 7 million before the recession began in 2007. Payrolls are still down by 5 million jobs from their peak.

But the report was just healthy enough to keep some hope alive for millions of job seekers -- although the three guys trying to take President Obama's job in November are sweating it a little bit more today.

The economy added 227,000 workers to nonfarm payrolls in February, the Bureau of Labor Statistics reported, while the unemployment rate held steady at 8.3 percent. That's the lowest jobless rate since February 2009, and down from a peak of 9.9 percent.

But it's still well above a low of 4.4 percent before the recession, so let's not all go slapping each other on the back just yet.

The gain in payrolls was a little bit more than economists had expected, but a little less than some Wall Street traders had hoped, and the result for the U.S. stock market was a wash -- the Dow Jones Industrial Average was recently just 20 points higher.

Solid employment data makes it a little less likely that Gentle Ben Bernanke will fire up his money helicopter, which makes Wall Street feel a little sad.

February's payroll gain was down a bit from the 283,000 jobs added to payrolls in January, but that number was revised higher on Friday, as was December's figure. Together, the revisions added 61,000 more jobs to the past two months' gains. And payrolls have grown by 245,000 jobs, on average, for the past three months.

"For the US economy to have piled on more than 200,000 jobs a month three times in a row will dispel any impression that the improvement is a blip," Marcus Bullus, trading director of MB Capital, wrote in an email. "The talk will now be of a sustained recovery."

President Obama will perhaps be interested to know that, according to the Atlanta Fed's nifty unemployment rate calculator, the recent pace of payroll growth could be just enough to get unemployment down to 7.5 percent by October -- just before the election.

The risk for the president is that the pace of job growth could slow, delaying the improvement in the jobless rate. What's more, the jobless rate could be pushed higher as encouraged workers re-enter the work force.

And it would take more than three years of this kind of job growth to get the unemployment rate back down to 4.4 percent.

The factory sector, which has been a relative bright spot in the economy recently, added 31,000 jobs in February, while the retail sector cut more than 7,000 jobs. Temporary help services added 45,000 jobs, possibly a leading indicator of permanent hiring ahead.

The government sector cut 6,000 jobs, but in a semi-miraculous development, local governments actually added 2,000 jobs.

There are still plenty of reasons for caution. In addition to the still-high number of unemployed people, the average duration of unemployment is still high, at 40 weeks.

The labor market is not spreading its love evenly -- black unemployment jumped to 14.1 percent from 13.6 percent in January. White unemployment, in contrast, ticked down to 7.3 percent.

And wages continue to lag -- average hourly earnings were up just 1.9 percent from a year ago, noted BTIG chief global economist Dan Greenhaus, not enough to keep up with inflation.

"We are disappointed yet again that income growth is not picking up in a more meaningful way," Greenhaus wrote in an email.

Still, he added, steady job growth should eventually lead to higher wages. "More people working suggests that over time, people’s incomes should begin to rise," Greenhaus wrote.

The U-6 measure of unemployment, which counts people marginally attached to the labor force, such as those forced to work part-time, fell to 14.9 percent, the lowest since January 2009.

Meanwhile, the unemployment rate held steady even as the labor force grew in February -- helping address another concern of some skeptics, that unemployment has only been falling because people have given up looking for work, taking them out of the labor force and off of the Labor Department's radar.